Select Bancorp (SLCT) 8-K Results of Operations and Financial Condition

Exhibit 99.1

 

  FOR RELEASE:   May 5, 2015

Mark A. Jeffries

Executive Vice President

Chief Financial Officer

Office: 910-892-7080 and Direct: 910-897-3603

markj@SelectBank.com

SelectBank.com

SELECT BANCORP REPORTS

FIRST QUARTER 2015 EARNINGS

DUNN, NC . . . Select Bancorp, Inc. (the “Company”NASDAQ: SLCT), the holding company for Select Bank & Trust, today reported net income of $1.7 million for the quarter ended March 31, 2015, and basic and diluted earnings per share of $0.15, compared to net income of $272,000 and basic and diluted earnings per share of $0.04 for the first quarter of 2014. The momentum of the economies of scale seen from the third quarter 2014 merger with legacy Select is a primary factor in the notable changes seen from the first quarter of 2014 to the quarter ended March 31, 2015. The merger impacts the first quarter of 2014 to first quarter of 2015 comparisons, including merger related expenses incurred in the first quarter of 2014.

Total assets, deposits, and total loans for the Company as of March 31, 2015, were $748.4 million, $600.5 million, and $558.9 million, respectively, compared to total assets of $520.3 million, total deposits of $441.3 million, and total loans of $345.8 million as of the same date in 2014.

Asset quality remains solid. Non-performing loans increased to $13.5 million at March 31, 2015 from $11.9 million at December 31, 2014. Non-performing loans equaled 2.41% of loans at March 31, 2015, increasing from 2.15% of loans at December 31, 2014. Other real estate and repossessed assets equaled $1.6 million at December 31, 2014 and reduced to $1.2 million at March 31, 2015. For the quarter, net loan charge-offs were $55,000 or 0.04% of average loans, compared to a recovery of $139,000 or -0.10% of average loans in the fourth quarter of 2014. At March 31, 2015, the allowance for loan losses was $6.9 million, or 1.24% of total loans, up from $6.8 million or 1.24% of total loans at December 31, 2014.

Commenting on first quarter results, President and CEO William L. Hedgepeth II said, “We continue to be very pleased with the effects of our July 25, 2014 merger with legacy Select Bank. Our performance results to-date for 2015 have met our projections. We look forward to implementing our enhanced strategic plan in the upcoming quarters of 2015 and intend to utilize the combined resources of the merged institutions to further expand in the markets we serve. This is an exciting time for not only Select, but for all of our shareholders, customers and communities, as a larger, stronger community bank.”

Mr. Hedgepeth added, "In addition to operating in markets with healthy economies, as part of our strategic planning process and growth philosophy, we make an effort to seek out prime locations and identify and hire outstanding bankers and lenders. They are experienced in each market they serve, and astute and highly skilled business people, whose client base has proven to be exceptionally loyal. I have said many times - we will compete on interest rates on loans, but we will not sacrifice credit quality; and our asset quality numbers support this strategy."

"As we move into the second half of the year, we plan to consolidate our Burlington and Gibsonville financial centers to better serve both communities and an additional emphasis will be placed on our financial center in Raleigh that opened during 2013. Select’s strategy continues to focus both on profit growth and franchise growth, as we continue to expand, while maintaining exceptional asset quality."

Select Bank has branch offices in these North Carolina communities: Dunn, Burlington, Clinton, Elizabeth City, Fayetteville, Gibsonville, Goldsboro, Greenville, Lillington, Lumberton, Raleigh and Washington.

The information as of and for the quarter ended March 31, 2015, as presented is unaudited. This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, (i) statements regarding certain of our goals and expectations with respect to earnings, earnings per share, revenue, expenses and the growth rate in such items, as well as other measures of economic performance, including statements relating to estimates of credit quality trends, and (ii) statements preceded by, followed by or that include the words “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “projects,” “outlook” or similar expressions. The actual results might differ materially from those projected in the forward-looking statements for various reasons, including, but not limited to, our ability to manage growth, substantial changes in financial markets, regulatory changes, changes in interest rates, loss of deposits and loan demand to other savings and financial institutions, and changes in real estate values and the real estate market. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the Company’s SEC filings, including its periodic reports under the Securities Exchange Act of 1934, as amended, copies of which are available upon request from the Company.

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Select Bancorp, Inc.

Selected Financial Information and Other Data

($ in thousands, except share and per share data)

	At or for the three months ended											At or for the twelve months ended
	March 31, 2015		December 31, 2014		September 30, 2014		June 30, 2014			March 31, 2014		December 31, 2014		December 31, 2013		December 31, 2012
Summary of Operations:
Total interest income	$	8,242	$	7,988	$	7,541	$	5,261		$	5,314	$	26,104	$	22,903	$	25,132
Total interest expense		939		1,141		1,169		1,098			1,111		4,519		5,258		6,632
Net interest income		7,303		6,847		6,372		4,163			4,203		21,585		17,645		18,500
Provision for (recovery of) loan losses		130		177		105		(427	)		(49		(194		(325		(2,597
Net interest income after provision		7,173		6,670		6,267		4,590			4,252		21,779		17,970		21,097
Noninterest income		863		836		650		565			624		2,675		2,629		3,598
Merger related expenses		-		217		1,325		237			162		1,941		-		-
Noninterest expense		5,370		5,345		5,168		3,917			4,289		18,719		15,855		17,236
Income before income taxes		2,666		1,944		424		1,001			425		3,794		4,744		7,459
Provision for income taxes		923		666		230		388			153		1,437		1,803		2,822
Net Income		1,743		1,278		194		613			272		2,357		2,941		4,637
Dividends on Preferred Stock		19		19		19		-			-		38		-		-
Net income available to common Shareholders	$	1,724	$	1,259	$	175	$	613		$	272	$	2,319	$	2,941	$	4,637
Share and Per Share Data:
Earnings per share - basic	$	0.15	$	0.11	$	0.02	$	0.09		$	0.04	$	0.26	$	0.43	$	0.67
Earnings per share - diluted	$	0.15	$	0.11	$	0.02	$	0.09		$	0.04	$	0.26	$	0.43	$	0.67
Book value per share	$	8.73	$	8.59	$	8.28	$	8.30		$	8.17	$	8.59	$	8.09	$	7.84
Tangible book value per share	$	7.99	$	7.82	$	7.50	$	8.29		$	8.14	$	7.82	$	8.07	$	7.79
Ending shares outstanding		11,458,561		11,377,980		11,349,368		6,931,168			6,921,742		11,377,980		6,921,352		6,913,636
Weighted average shares outstanding:
Basic		11,426,378		11,375,803		10,195,846		6,923,640			6,921,651		8,870,114		6,918,814		6,898,147
Diluted		11,510,147		11,475,865		10,312,085		6,928,428			6,924,164		8,974,384		6,919,760		6,898,377
Selected Performance Ratios:
Return on average assets(2)		0.94%		0.65%		0.10%		0.48	%		0.21%		0.37%		0.53%		0.81%
Return on average equity(2)		7.11%		5.23%		0.82%		4.35	%		1.94%		3.12%		5.28%		8.79%
Net interest margin		4.30%		3.87%		3.99%		3.62	%		3.60%		3.88%		3.46%		3.57%
Efficiency ratio(1)		65.76%		69.57%		73.60%		82.85	%		88.85%		77.16%		78.20%		78.00%
Period End Balance Sheet Data:
Loans, net of unearned income	$	558,923	$	552,038	$	546,475	$	333,868		$	345,827	$	552,038	$	346,500	$	367,891
Total Earning Assets		663,017		698,266		710,005		458,696			470,544		698,266		483,054		543,674
Goodwill		7,077		7,077		7,077		-			-		7,077		-		-
Core Deposit Intangible		1,470		1,625		1,786		124			153		1,625		182		298
Total Assets		748,371		766,121		784,983		508,282			520,276		766,121		525,646		585,453
Deposits		600,520		618,902		644,093		428,734			441,298		618,902		448,458		498,559
Short term debt		18,943		20,733		18,077		7,179			7,624		20,733		6,305		17,848
Long term debt		25,282		25,591		26,049		12,372			12,372		25,591		12,372		12,372
Shareholders' equity		100,076		97,685		93,995		57,551			56,523		97,685		56,004		54,179
Selected Average Balances:
Gross Loans	$	557,177	$	546,626	$	489,563	$	336,286		$	346,968	$	430,571	$	354,871	$	391,648
Total Earning Assets		672,655		702,818		632,922		465,976			473,136		565,264		511,597		532,193
Core Deposit Intangible		1,546		1,714		1,496		136			167		884		237		389
Total Assets		748,047		776,839		709,480		514,539			520,746		631,905		555,354		574,616
Deposits		600,601		632,633		582,825		435,976			441,637		523,954		470,526		481,387
Short term debt		19,298		19,790		14,652		6,748			7,354		9,957		13,879		17,848
Long term debt		25,444		25,818		22,343		12,372			12,372		20,494		12,372		12,372
Shareholders' equity		99,376		97,030		84,744		57,158			56,780		74,365		55,701		52,769
Asset Quality Ratios:
Nonperforming loans	$	13,473	$	11,876	$	12,375	$	12,952		$	14,605	$	11,876	$	15,856	$	12,030
Other real estate owned		1,187		1,585		1,687		1,169			1,233		1,585		2,008		2,833
Allowance for loan losses		6,919		6,844		6,529		6,447			7,025		6,844		7,054		7,897
Nonperforming loans(3) to period-end loans		2.41%		2.15%		2.26%		3.88	%		4.22%		2.15%		4.58%		3.27%
Allowance for loan losses to period-end loans		1.24%		1.24%		1.19%		1.93	%		2.03%		1.24%		2.04%		2.15%
Delinquency Ratio(4)		0.23%		0.91%		0.36%		0.15	%		0.21%		0.91%		0.25%		0.32%
Net loan charge-offs to average loans		0.04%		-0.10%		0.02%		0.18	%		-0.02%		-0.03%		0.15%		-0.12%

(1)	Efficiency ratio is calculated as non-interest expenses divided by the sum of net interest income and non-interest income.
(2)	Annualized.
(3)	Nonperforming loans consist of non-accrual loans and restructured loans.
(4)	Delinquency Ratio includes 30-89 days past due and excludes non-accrual loans.